Trade encourages open and transparent government institutions, improves the lives of individuals, and fosters democratic governance.

Trade liberalization brings about structural changes that are essential to democracy.

• Increased trade encourages the elimination of corruption and the establishment of the rule of law. Strong, transparent legal and regulatory regimes are necessary to attract investment and encourage economic exchange and also serve as the building blocks of free societies.
• Increased trade facilitates the exchange of new ideas and exposure to different ways of thinking and organizing economically, civilly and politically.
• Free trade agreements promote the rule of law, government transparency, increased citizen participation in the political process and freedom from central state regulation.
• For example, the North American Free Trade Agreement (NAFTA) has encouraged political competition and transformation in Mexico. Seven years after NAFTA went into effect, Vicente Fox became the first opposition-party president to be elected after more than 70 years of one-party rule.
• According to Daniel T. Griswold of the CATO Institute, “The most economically open countries today are more than three times as likely to enjoy full political and civil freedoms as those that are relatively closed. Those that are closed are nine times more likely to completely suppress civil and political freedoms than those that are open.”

Economic reforms can lead to the emergence of an economically independent and politically aware middle class.

• Trade liberalization raises incomes and creates a larger middle class of citizens who enjoy new opportunities, more choices and more control over their daily lives. Increased trade opens societies to new technologies, communications and democratic ideals.
• In China, an emerging middle class is benefiting greatly from China’s recent economic growth. Chinese citizens are now becoming independent homeowners, traveling internationally, studying abroad and engaging in international commerce.
• Governments that grant citizens the right to engage freely in commerce find it difficult to simultaneously deprive citizens of political and civil liberties.

Countries that open their economies and eradicate trade barriers also increase transparency and citizen participation in their government institutions.